Did "Small Business Saturday" Make a Difference?

I came across a decent balanced analysis of American Express' Small Business Saturday campaign on http://www.newsy.com/ . The response from small business owners seems mixed. It certainly seems like a good idea to raise awareness of the impact of spending in local stores - but I do wonder whether the campaign did anything to change customer shopping habits or if it was just good PR. What do you think? Did the campaign work? Or do you have suggestions for how American Express can improve next year?

More Holiday Promotions: Boston's "Holiday's on Main Streets"

The City of Boston has always been ahead of the curve in its efforts to support traditional neighborhood commercial districts. This holiday season is no exception. This week Mayor Thomas Menino announced the "Deck the Windows of Boston Main Streets" contest in an effort to recognize the best holiday window decorations by small business owners along their twenty designated 'Main Street' districts. For a look at the flyer, click here.

I like how the City is encouraging business owners to decorate their windows and create a festive holiday atmosphere in traditional business districts. This is just one component of its expanding "Holidays on Main Streets" program. In addition to the contest, the city has established free holiday parking and maintains a website announcing local holiday events along each of the Main Street districts.

Holiday Marketing: Beyond the Basics

Christmas Tree. Check. Menorah. Check. Holiday lights. Check. Businesses have come to expect these basic services over the holidays. They know that a festive atmosphere helps drive sales - and holiday sales are critical to making sure they end the year in the black.

Beyond these holiday basics, what else can a commercial district management entity do to help local businesses thrive over the holiday season? In the neighborhoods of Kingsbridge, Riverdale and Van Courtland in New York, a local community development corporation, KRVC, is taking holiday marketing to the next level with a holiday shopping guide and shuttle bus betwen the districts. Piggybacking on Black Friday, which is traditionally the Friday after Thanksgiving, KRVC is encouraging residents to shop local on Sunday, providing dedicated parking donated by Staples, the national office supply retailer, and offering a free shuttle with dedicated stops throughout the three participating districts. Sponsors include State Farm Insurance and Chase Bank branches in the neighborhood. Participating businesses recieve promotion, and in return, do something special that day in their stores. The event has recieved local news coverage, and local businesses express high hopes that these new customers convert into return sales. This is an exciting event and an extremelly proactive way for a local commercial district management entity to help drive sales over the holiday season. Take a look at the event poster by clicking here or cutting and pasting the following link [http://www.krvcdc.org/pdf/Shopping%20Guide%20Map.pdf].

Target goes 'Urban' and Big Box vs. Small Box

This is a follow-up blog to a previous post on Walmart’s emerging ‘urban strategy’. Target has also announced that it will be focusing its efforts on urban areas, including remodeling existing stores and focusing on smaller format stores more appropriate for urban markets.

How small is small?
Target has indicated plans to introduce a smaller store formats in the range of 60,000 to 100,000 square feet. Compared with its typical format of 125,000 to 180,000 square feet, this is small, but for most urban markets, finding that much square footage can still be a challenge, if not downright impossible. They plan to open the first small-format store in Seattle in 2012 – with plans to expand to at least 10 additional cities, including San Francisco and Baltimore, in the coming years. The stores will continue to carry a smaller selection of everything from fashion to home furnishing, but will focus on daily needs. These new Target stores will also include groceries. Target is rolling out a store within a store concept called “P-Fresh” that offers groceries within a 10,000 – 12,000 sf format.

Will this format work for or against traditional business districts?
Not every business district can support, or wants, a Target in their vicinity. The square footage requirements, not to mention the parking requirements, do not make this concept suitable for most traditional business districts. Where smaller format ‘big box’ stores do work are dense urban areas where parking can be reduced because of high mass transit usage. In New York City, Target has successfully development new stores – very profitable ones at that – where parking is limited and in some cases non-existent. In other markets, this is simply not possible.

Big box or small box on our commercial corridors?
A recent "Livability" survey by the Municipal Art Society found that far from shunning chain stores, most people want a healthy mix of retail in their neighborhoods – including chains stores. Not only that, but they actually prefer chain stores to mom-and-pops when shopping for certain goods, including food and apparel.

But not all chains are alike. Smaller chains, like Dunkin Donuts, Subway, Walgreens Drugstores, etc. are more in keeping and appropriate in traditional commercial districts and often help draw more pedestrian traffic to commercial districts – helping mom-and-pops increase sales as well.

Additional research into commercial districts suggests that there is a marked difference between  the impact of ‘big-box’ chains like Target and ‘small-box’ chains like drugstores on traditional commercial districts. A seminal study of all of Philadelphia commercial districts - completed two years ago by Philadelphia-based Econsult - found that while big box stores do increase trips to the district, they do not always help surrounding businesses grow their retail sales [For more on the study, click here for the Executive Summary]. The study also found that “big-box stores…are moderately harmful for real estate values” and “large-scale national chains are associated with lower retail sales in some circumstances.” It seems that people want to shop at big-box stores, but don’t want to live too close to them. Which means that most urban districts might want to take care before putting out the welcome sign for big-box stores.

On the other hand, small-box stores, and pharmacies in particular, were found to play a positive role on commercial corridors. The study found that “chain pharmacies are beneficial by all measures in a corridor, and are most beneficial when they are in, not near, a mixed corridor. Chain pharmacies …should be seen as an amenity to a neighborhood.”

What is your take on the chain store?

"One" Approach to Commercial District Revitalization

Managing commercial districts where multiple properties are controlled by a bevy of different owners is a little bit like herding cats - difficult to say the least. Successful district management is further challenged by absentee owners that are difficult to reach and engage in the commercial revitalization effort. One alternative strategy for commercial revitalization is the 'single-owner' model. This is when a one developer begins amassing a critical mass of buildings along a commercial district. This approach allows the owner to manage the area much like a shopping center asset - taking great care with tenant mix, controlling improvements to the public realm, varying leasehold rates to attract and keep a good mix of tenants, and creating and marketing a unique district identity.

This week, the New York Times highlighted New York developer, Greg O'Connell in his efforts to apply this strategy to Mount Morris, New York [Resurrecting a Village by Buying Up Main Street], a rural town in upstate New York. In the case of Mount Morris, O’Connell is following in the well tread footsteps of urban visionaries such as Dana Crawford, who started buying property in downtown Denver in the 1960's and created Larimer Square. Or Rosyln Hill (pictured right), who is credited with turning Northeast Alberta Street, in Portland, Oregon, around starting in the 1990's.

This approach is not for the faint of heart. It requires significant vision, not to mention a healthy amount of capital for investment. Besides that, when does this approach work and why?

• An undervalued district with good bones. These visionaries often begin by surreptitiously buying undervalued assets - primarily attractive historic buildings in pedestrian-friendly commercial districts. The trick here is to buy the properties very cheaply. The only way to off set the expenses associated with renovating historic buildings is the low cost of purchase. 
• Great care crafting a distinct tenant mix. A visionary owner who takes great care attracting and retaining a unique set of businesses. In Larimer Square, Crawford started by leasing spaces to antique stores. In Portland, Hill focused on galleries and designers. This often means offering attractive rents and renting to non-credit tenants - i.e. mom-and-pops that offer distinctive goods and services.
• Requiring tenants to adhere to a set of rules and regulations. In Mount Morris, O'Connell requires his tenants to remain open one evening a week, leave their lights on at night, and change their window displays at least four times a year. In Portland, Hill did not allow her tenants to use metal bars on their windows or lock their doors during business hours. These rules are often similar, in spirit at least, to the rules that tenants must abide by in local malls, where open and closing hours are often written into leases and fines can be levied if tenants do not comply.

As appealing as this approach may be - not every property owner can pull off this kind of transformation. When owners lack vision and see their properties as cash cows, renting to the highest bidder without thought to the quality or the balance of tenants, they effectively undermine the value of their asset.
The single-owner approach is also not one that can easily be replicated in high-value urban environments. When property is expensive and overvalued, it can be difficult for a single owner to purchase the critical mass of properties necessary to make a difference in crafting tenant mix or managing district identity. It can also be difficult for developers, who may have paid dearly for these assets, to invest and improve the properties as they require. The need to produce cash flow through rent begins to trump the ability to keep rents low to encourage interesting and creative retail in the spaces.

While the single-owner approach is not for everyone, there is alot to learn from those visionary urban pioneers who are able to pull it off.

The Do's and Don'ts on Pitching Stories to the Press

Media saavy commercial district managers know how to turn their good work into free press. And free press for your district beats paid advertising any day. The Commercial District Advisor turns to Anat Gerstein, of Anat Gerstein Inc., to help us learn how to effectively pitch stories to the press.

Anat's firm serves the non-profit sector, and she recently moderated a panel discussion on how to get the press to cover your story. Panelists included Fernanda Santos from the New York Times, Beth Fertig from WNYC Radio, Gail Robinson from Gotham Gazette, and Shannon Troetel from NY1 News. The workshop was sponsored by the Nonprofit Coordinating Committee and hosted by the New York Times. Here are some of the do's and don'ts discussed by the panelists:

DO

• Give reporters a heads up about upcoming events so they can plan accordingly  
• Have clients/real people available to discuss the issue (they want to hear from these people more than they want to hear from the Executive Director)  
• Your homework! Make sure you know what the reporters cover and how they cover it before you pitch and tailor your pitch to fit the reporters needs, not your own! Click here for a simple guide on creating a targeted media list
• Provide a background for the story. Location isn't only important for TV stories, its also important for radio and print reporters like Fernanda Santos who want to get a broader understanding of the story and the people

DON'T

• Follow up only to ask if the reporter received your email
• Pitch old news  
• Call when reporters are on deadline (usually the late afternoons and early evenings)

You can find more tips on pitching the press here. For daily communications news and tips for non-profits, follow Anat on Twitter @anatgerstein

Helping New and Old Businesses Ride the Wave of Neighborhood Change

Like many commercial districts, Astoria, a tight-knit urban neighborhood in Queens, NY, ["A Small Business Barometer", New York Times, Nov. 8, 2010] is a changing neighborhood. Yesterday's immigrant residents make room for today’s mix of residents – who often arrive with a different set of spending habits. Helping local businesses ride the wave of change is often part of a commercial district managers job.

Change can be difficult - and the recession has helped speed up the cycle for some businesses who were already facing a shrinking customer base. I sometimes get asked by commercial district managers how they can help existing businesses keep up with these changes in demographics. Part of the answer is helping local businesses keep their finger on the pulse of these changes – which may mean reworking their product mix and repositioning their stores to meet a new segment of growing demographic. Commercial district managers can serve as intermediaries in this effort, sharing important market and demographic information via newsletters and/or regular presentations to business owner's where critical information and market data can be shared and used to grow retail sales.

Opening new businesses is yet another challenge, made more difficult by some of the very typical problems that businesses face in communities across the nation. Below are some of the challenges cited by business owners in the NYTimes article, coupled with a few suggestions for how commercial district managers might help overcome them.

• Difficulty getting banks loans and finding affordable financing. Can the commercial district manager identify non-profit lenders or government agencies who can provide financing where private banks cannot?
• A lengthy and unpredictable permitting process. Small business owners are often cash strapped - and the longer the doors are closed with expenses piling up and no revenue coming in can cripple a business before it is even open. Can the commecial district manager, through existing relationships with governement officials or knowledge of the process, help facilitate permitting, or at least educate a new business owners on what to expect so that the process doesn't take any longer than it needs to? Can the commercial district management entity and it's board of directors advocate for a streamlined permitting process to help small businesses?
• Deciding what merchandise mix makes sense for a neighborhood means knowing the community. As one business owner asked “The big question for us is, are people going to buy a $100 frame or a $300 frame?” Can the commercial district management entity commission regular marketing studies and share this data, and an analysis of how to interpret and act on the data, with local business owners?
• Help managing the vagaries of community approval, including in community resistance to a liquor license, slowed opening of a restaurant by months and added significantly to legal costs. Can the commercial district manager, who likely has cultivated a good relationship with community leaders, help anticipate challenges to permit requests and thereby help the business prepare adequately for public presentations and meetings?

These are just a few ways in which commercial district managers can help grease the wheels of economic development in the district. We'd love to hear other suggestions from our readers.